Medicaid could be the next headache for Obamacare
By: Kyle Cheney October 24, 2013 05:06 AM EST

A new phase of the Obamacare launch is coming, this one involving Medicaid. And it could be déjà vu all over again.

On Nov. 1, the health law’s malfunctioning enrollment system is supposed to send reams of data to states so they can begin placing thousands of people into Medicaid. But state officials say that transfer system has barely been tested and could be vulnerable to technical failures like those that have crippled the broader Obamacare sign-up process.

“We’re flying blind on what the process is,” said Kathleen Nolan, state policy head of the National Association of Medicaid Directors. “There hasn’t been the capacity to do a lot of the testing. … There’s a natural concern that with a major load of data to be sent all at once — there is concern that what has been tested may not be able to handle the volume.”

It’s a challenge for state governments, and people trying to sign up for the low-income health care program could be left unsure of their coverage status.

Marilyn Tavenner, who runs the Centers for Medicare & Medicaid Services, on a conference call with states Tuesday did not offer a timetable for a full repair, according to Matt Salo, executive director of the National Association of Medicaid Directors. The date was already postponed once, from Oct. 1.

Nolan said some people managed to sign up on the flawed HealthCare.gov website only to be told to reach out to their local Medicaid agencies to finalize enrollment. But the local Medicaid offices can’t confirm anything because the applications haven’t been transferred.

“People are getting a little confused,” Nolan said.

A federal Medicaid spokeswoman said the Obama administration has delivered a basic snapshot of the Medicaid-eligible population to help states get a sense of the numbers so they can plan.

But that so-called flat file includes only names and addresses, not nearly the level of data state Medicaid programs need to process applications.

Under Obamacare, millions of low-income uninsured people are expected to enroll in Medicaid, which will be expanded significantly in about half the states on Jan. 1. Plus, the health law’s enrollment push is expected to bring out of the woodwork people who are currently eligible but haven’t already signed up for Medicaid. Early data from states running their own enrollment systems are reporting tens of thousands of new Medicaid enrollees so far this month, a potential indicator of strong interest.

States running their own health insurance exchanges have encountered fewer problems.

“It’s a one-stop shopping experience,” said Carrie Banahan, executive director of Kentucky’s enrollment system, Kynect. Banahan said the state was able to integrate all of its enrollment — Medicaid and other parts of Obamacare. “Since the system makes a single eligibility determination, that wasn’t an issue. In states that don’t have integrated eligibility systems, I can see where that could be an issue.”

Some Medicaid experts say the transfer may have to be delayed past Nov. 1.

“They cannot afford to dump bad data on the states, and it would waste precious time,” said Kip Piper, a former adviser to CMS. “Perhaps they will take a more baby step on Nov. 1, allowing states to accept a small number of files and run them through their eligibility systems.”

Dennis Smith, a conservative health care consultant who has worked on Medicaid for former President George W. Bush, Wisconsin Gov. Scott Walker and The Heritage Foundation, predicted delay, although he doesn’t expect a flood of applications. He said states will be so concerned about the accuracy of the files after all the problems with the federal portal that there will be “a lot of double-checking.” He worries that further delay could leave some people without coverage on Jan. 1 because states can take up to 45 days to review applications.

There is a potential workaround. Smith noted that people can also sign up for Medicaid directly through the state. That could ease pressure on the federal enrollment system in the short run, he said.

But aside from that, state Medicaid programs can’t do much to prepare for Nov. 1 other than wait for the federal government to hit the “on” switch, said Nolan. There’s no Plan B if things go awry.

“There’s not a lot the Medicaid directors can do until they get the applications,” she said. “If they don’t get the applications, I’m not sure what the contingency strategy is.”